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Market Opportunites And Threats Make 2018 A Real Challenge

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A couple of months into the new year and 2018 is turning out to be as challenging as predicted. A squeeze on supplies has pushed up prices. Demand in the UK is rising strongly. Pinch points may occur in the peak season.
It has become increasingly clear as AVS Fencing has met with its Supply Chain that supplies of timber have tightened. A perfect storm of factors has come together:

A resurgent US housing market is sucking in global timber stocks including Scandinavian timber usually destined for Europe

China and South East Asia economies have returned to rapid expansion

Baltic supplies are down due to both unseasonably wet weather last year and then the big freeze hitting their ports

The Pound is weak against the Euro

The Biomass industry is taking out the smaller logs used in making pallets forcing Pallet companies to pull timber from other sources

Indigenous UK supplies cannot make up the difference. It is suggested the October ‘87 storm may be playing a part. The five year lag to replant the lost four million cubic metres of timber has left a deficit in trees of the right age to fell.

The weather has turned from too wet to freezing and potentially flooding; making extra harvesting very difficult.

This is causing concern. Many are saying that the market is looking tougher than 2014.

Peter Barnett of Taylor Maxwell* says “The price of saw logs is now at record levels in the UK/Ireland and sawmills are faced with a simple choice; either pay the price and get the timber or walk away empty handed. We take the view that a sawmill without logs is a bit like a pub without beer and so have to take the decision to buy sufficient raw material to maintain viable production levels – particularly heading into the Spring fencing season.”

Any major weather ‘blows’ could result in wholesalers not being able to meet demand. The knock on effect to the building trade, who depend on fencing to meet site Health and Safety compliance criteria, could be serious; affecting building schedules and economics.

It requires excellent supply chain management to stay abreast of the situation. John Brett, AVS Fencing Supplies Managing Director, has been around the Home nations and Ireland to check out the sawmills to see how they are coping. The answer he says is that “they are working extremely hard and virtually at capacity. There is no head room. The demise over the past couple of years of some of smaller mills has not helped, but at this point in time it is the availability of timber rather than processing capacity that is key to the market.”

Figures from the Forestry Commission demonstrate this – see attached image and
reference https://goo.gl/3qjAhh

Raising awareness of the possible problems ahead amongst trade customers has become a priority. The advice from AVS Fencing is to inform the market and take a sensible approach to any discounting. AVS customers have been made aware and have responded well by bring forward orders they know are in the pipe, giving plenty of time to securely source them.

END

Notes about AVS Fencing Supplies Ltd:
AVS Fencing Supplies has nine branches around the South and East of England: Aylesbury, Basingstoke, Guildford, Havant, Henfield, Lewes, Peterborough, Rudgwick, and Wokingham. The Support Office is in Horsham. It was set up over 20 years ago and has grown steadily since then. It is now one of the larger players in a very fragmented market.

AVS supplies fencing and landscaping materials to the trade and to retail customers.

The Managing Director is John Brett and Sales Director is Marc Coulson.

*Taylor Maxwell Timber is a national team dedicated to delivering quality timber products. For over 50 years, its relationships with the world’s best sawmills has enabled it to offer clients a year-round supply of timber for a wide range of commercial uses. TMT work with AVS Fencing.